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Sakhumnotho Group Holdings acquires 26% equity in the Refinex and SA Tank Terminals Holding Company

Sakhumnotho Group Holdings has recently acquired a 26% equity in the Refinex and SA Tank Terminals (SATT) holding company. The deal is valued at R100 million and is a precursor to increasing shareholding in the company in the future and signifies the arrival of an important new player in the energy market.
Sakhumnotho Group Holdings acquires 26% equity in the Refinex and SA Tank Terminals Holding Company

Refinex, formerly Energy Oil Oleochemicals, was founded in 1983 and is one of the largest privately owned petrochemical companies in Southern Africa. It is a bulk supplier of fuel oils into the energy market. Together with SA Tank Terminals, which provides a bulk liquid storage service to customers, the company ensures easy access to a supply of products through processing, manufacturing and blending petrochemicals; transportation; and storage. The Refinex and SATT customers includes a range of private sector as well as public sector entities.

Sakhumnotho’s stake in Refinex marks the Group’s second investment in the Petro-chemicals sector, after their initial investment in Total Southern Africa. This strengthens their position as a significant black player in the market. Besides this strategic advantage, the investment also gives Sakhumnotho entry into a business that processes waste oils to value-added products such as solvents and other Petro chemicals, providing the market with alternative forms of energy as well environmental sustainability benefits. In addition, the investment in SA Tank Terminals gives Sakhumnotho a foothold in the bulk liquid fuel storage business, further strengthening their position in the mid-stream value chain of the petroleum products market.

From the Refinex/SATT perspective, the deal also provides these companies with notable benefits, not least of which is significant BEE credentials. Sakhumnotho is a wholly black-owned company that has diversified investment interests across numerous sectors, and throughout the African continent.

This acquisition is hoped to, not only, have a positive impact on the entities involved but on the industry as a whole. Refinex and SATT are privately owned businesses with the skill and technology to process various petrochemical streams. Matched with Sakhumnotho’s own experience in Oil & Gas, as well as the Group’s African network, the companies aim to consolidate the value chain – from supply to storage to transport and, finally, to the customer.

In recent times, SOEs have been faced with a variety of difficulties relating to their operational activities leading to conditions that affect both business and society. There are solutions to be found, including in the renewable arena. With the right partners, and with government support, this partnership could offer and develop cradle-to-grave solutions. An example of this journey already exists in the area of waste where Waste streams are taken from one SOE, processed (thanks to possession of the plant, equipment and licenses) and then the fuel is used for another SOE as an end user.

“This deal signifies tremendous growth opportunities for both parties. With the strength of these two entities together, we aim to become an important player in the sector, growing our access to markets. Our history in shipping, tankage, processing and storage, now combined with Sakhumnotho’s expertise and experience in this sector, will enable us to offer a wider range of possibilities to customers,” says Gavin Markgraaff, Group Managing Director, Refinex.

The deal also promises a boon for the environment. Refinex sources feedstock ranging from virgin oils to waste oils and refines them to produce high quality furnace fuels and solvents for customers throughout Southern Africa. Recycling waste oil saves these valuable resources and prevents them from not only being dumped and polluting our natural land and water resources, causing untold damage to the environment, but allows them to be re-used. By enabling growth and expansion, Refinex hopes to create greater impact on the environment, and prevent waste oil from tainting our valuable natural resources.

The Sakhomnotho team responsible for the deal was led by Mr Sipho Mseleku, President and CEO of the Group, and comprised Frencel Gillion, Head of Investments, Mr Bradley Cerf, Head of Sakhumnotho Energy, and Investment Associates: Mr Lebo Raolane, Mr Peter Chiwandamira and Mr Paul Ndaba. Mr Mseleku, along with CFO, Ms Kholofelo, will represent the Group on Refinex's Board of Directors. The Management Committee will be joined by Mr Bradley Cerff and Ms Nelisiwe Mathebula from the Sakhumnotho team.

Transaction advisors on Refinex/SATT’s side included Bowden Corporate Finance and Werksmans, while Sakhumnotho was advised by Mpilo Capital and Ntuta Singh & de Jager Inc.

On the deal, Mr Sipho Mseleku said, “At Sakhumnotho, we are excited and proud to be part of Refinex and SATT. This deal further deepens our involvement in the Oil & Gas sector and allows us to play a greater part in the industry’s future. There are real synergies of business, purpose, as well as spirit between the two companies and we look forward to growing together as we map the journey ahead and create value for all involved.”

8 Nov 2021 12:41